Travel money cards vs credit cards

The days of carrying large wads of crumpled foreign currency in a wallet or purse while vacationing around the world are mostly behind us. You can simply use your bank card or even your phone to make purchases worldwide. There are also temporary travel cards. However, deciding the best way to transact and spend while traveling can be confusing.

Can I use my card abroad? What are the fees and exchange rates? Is it safe and convenient? It can be beneficial to use a combination of credit, debit and travel money cards on your next vacation. We’ll answer all of these questions and more to determine which option is right for you.

Using a travel card

Travel money cards, or travel cards, are payment cards that you can load with multiple foreign currencies before departure. You can use them to spend or withdraw money abroad. Preloading these cards is convenient but the rates are fixed, meaning you won’t be subject to fluctuations in the Australian dollar. If the dollar gets stronger at home, you risk missing out on increases in value. Conversely, if it goes down, you’ll probably be better off.

Fees for travel cards:

  • First purchase and loading
  • Currency conversion
  • Refills or inactivity
  • Balance Refunds
  • Replacement card

Some travel money cards take a percentage of the starting balance, around 1%, or charge a flat fee, usually up to $15. Many providers waive this cost. Depending on how much you plan to load, it would be best to compare your options before deciding on a card.

Currency conversion fees range from 2-4%, while some cards offer free services. If you need to pay with a currency that has not been preloaded on your card, you will likely incur a higher conversion cost at the time of purchase.

Did you spend a little too much on this sumptuous evening in Paris? You may be charged a fee of up to $15 to top up your card with the currency needed to continue your trip. On the other hand, if you don’t spend enough and your card remains inactive for a month or more, you can be charged up to $4 for an inactive account.

Some cards charge a fee, between $10 and $15, to return your funds balance after travel. You can sometimes avoid this cost by linking the card to a bank account or continuing to use the card for purchases in Australia.

If you lose your card while travelling, it can cost you up to $15 to replace it.

Using your credit and debit cards abroad

Credit cards and debit cards are among the easiest ways to spend money abroad. You can use your existing cards so there are no upfront fees. Transactions abroad are the same as in Australia, except for additional international fees that apply.

Charges for credit cards:

Foreign currency conversion costs can often be overlooked when you’re busy enjoying your vacation. This fee can vary from 2-4% and is charged for each individual transaction. It is important to note that many cards on the market currently offer free conversions.

There are also fees associated with overseas cash advances. You will be stung with currency conversion fees and interest rate fees – ranging from 19-22%, sometimes more.

Charges for debit cards:

  • Currency conversion
  • ATM withdrawals abroad
  • Purchase abroad

Although debit cards do not incur the same interest charges on expensive cash advances as credit cards, you should be aware that the same currency conversion fees apply and there may be ATM withdrawal fees averaging $5 per transaction. Many financial institutions in Australia waive these overseas withdrawal fees, so be sure to check with your bank about these fees.


There are still those who prefer their finances to be tangible. Having cash on you can help you watch your budget and avoid overspending. However, this can be a risky business as pickpockets are still prevalent in many countries and if you misplace your bankroll there is no way to recover the lost funds. If you travel to different countries during your trip, you will have to go to exchange offices to convert your money and be subject to potentially exorbitant fees and rates.

A simple solution to going cashless can be to use your banking app or a third-party budgeting tool to track and control your spending abroad. You can set daily spending limits, calculate costs, record expenses and much more.

What is the best option for you?

There are a number of no-fee credit cards, debit cards, and travel cards. Each card may incur different fees, so it’s worth comparing your options to decide which one is best for your trip.

Some cards may not allow you to load a particular currency, while others will have more expensive cross-currency conversion fees. For example, some credit and debit cards that offer 0% fees for purchases abroad may charge a higher exchange rate. This is not necessarily a disadvantage as this premium rate is still generally better than those offered by most travel cards.

When loading travel money cards with foreign currencies, you should try to complete these transactions at the most convenient time when exchange rates are most lucrative. Be sure to check real-time rates with your card provider, as they are often different from mid-market rates you can find online. Banking and foreign exchange rate spreads are generally higher, especially among travel card providers.

Most credit, debit and travel money cards can be used worldwide, as global merchants generally accept the Visa, Mastercard and American Express networks. You should check the specific country you are visiting to ensure that the card you choose will be recognized and accepted.

Credit and debit card funds are often protected against fraudulent transactions and you will have access to fast recourse and recovery options. Travel money cards may not offer the same level of dispute resolution, so be sure to check the terms and conditions of individual cards.

Many international accommodation providers and tour operators require pre-authorization for bookings, which may not be possible when using debit cards or travel money.

There are a range of credit cards that offer valuable extras such as spending rewards programs, travel insurance, airport lounge access and free hotel concierge services.

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